With this paper we provide the first micro-level evidence on the linkage between firm complexity and volatility. By defining product complexity à la Hausmann and Hidalgo (2009), we find that a higher complexity level of a firm's product basket is associated to a reduction of its output fluctuations. This evidence is robust to the control for omitted variables, sample selection, and to the use of alternative volatility and complexity indicators. Across similar firms, active in different sectors and regions, both technological factors and product market conditions explain the effect of complexity on volatility. However, within narrowly defined sectors and locations, the complexity-volatility nexus fully reflects the role of the human capital content of firms' product baskets.

Maggioni, D., Lo Turco, A., Gallegati, M., Does product complexity matter for firms' output volatility?, <<JOURNAL OF DEVELOPMENT ECONOMICS>>, 2016; 121 (N/A): 94-109. [doi:10.1016/j.jdeveco.2016.03.006] [http://hdl.handle.net/10807/166885]

Does product complexity matter for firms' output volatility?

Maggioni, Daniela
;
2016

Abstract

With this paper we provide the first micro-level evidence on the linkage between firm complexity and volatility. By defining product complexity à la Hausmann and Hidalgo (2009), we find that a higher complexity level of a firm's product basket is associated to a reduction of its output fluctuations. This evidence is robust to the control for omitted variables, sample selection, and to the use of alternative volatility and complexity indicators. Across similar firms, active in different sectors and regions, both technological factors and product market conditions explain the effect of complexity on volatility. However, within narrowly defined sectors and locations, the complexity-volatility nexus fully reflects the role of the human capital content of firms' product baskets.
2016
Inglese
Maggioni, D., Lo Turco, A., Gallegati, M., Does product complexity matter for firms' output volatility?, <<JOURNAL OF DEVELOPMENT ECONOMICS>>, 2016; 121 (N/A): 94-109. [doi:10.1016/j.jdeveco.2016.03.006] [http://hdl.handle.net/10807/166885]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10807/166885
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